BP’s soaring profits have ignited fierce political debate in the U.K., where the company’s $8.45 billion earnings for the second quarter have added fuel to the fire of a growing cost of living crisis. The British energy giant’s decision to increase stock buybacks and raise dividends by 10% has left many questioning the morality of such rewards for investors amid widespread financial hardship caused by soaring energy prices.
The controversy began when BP CEO Bernard Looney, whose annual salary is £1.4 million, was caught off guard in an interview when asked about the U.K. government’s financial assistance plan for households struggling with energy bills this winter. Looney’s unawareness of the government’s intervention, contrasted with his substantial personal wealth, led to a quick £400 donation to charity in an attempt to quell public outrage.
BP’s profit surge is part of a larger trend seen across the oil and gas sector, with companies reporting record earnings despite the U.K.’s economic struggles. Experts predict that the average household’s energy bill will surpass £3,000 by the end of 2023—an unprecedented increase that threatens to push millions into poverty.
In response, Looney acknowledged the financial strain on households, stating that BP is working hard to address the energy crisis. However, many view the company’s actions as insufficient, with increasing pressure on the government to impose higher taxes on the oil and gas sector to help support struggling families.
Rishi Sunak, a leading candidate for Prime Minister, had already implemented a windfall tax on oil companies to help fund public support measures. BP estimates it will face an additional $800 million in levies on its North Sea business through 2025 due to this tax. But the calls for more significant measures grow louder.
Doug Parr, chief scientist for Greenpeace U.K., slammed the situation: “While households are being plunged into poverty, fossil fuel companies are laughing all the way to the bank. The government must introduce a proper windfall tax on these monster profits.”
In addition to Looney’s charitable donation, BP emphasized its commitment to investing £18 billion into the U.K. over the next decade. This investment will be split between fossil fuel extraction, renewable energy production, and electric vehicle charging infrastructure—efforts that BP claims will create thousands of jobs across the country. However, the company’s commitment to these investments is unlikely to quell the growing demands for more immediate and substantial support for those struggling with energy costs.
